Roll Up

Posted on September 15, 2011 by admin

Monthly options for Sept are due to expire tomorrow.  The following are what I did:

  1. BIDU: (options spreads) bought to cover BIDU Sept 2011 $105 strike and sold Mar 2012 $110 strike for $3/sh credit.  The net gain on this trade is ($3 + $5 of strike difference) for a total of $8/sh gain.  $110 for BIDU is well below its 200 day SMA (which is $129), therefore it’s very safe.  $8/sh gain divided by the maintenance requirement = ~21% gain in 6 months (or 42% annualized).
  2. SLW, Sept $33, rolled up to Oct $34 for a credit (gain) of $0.75/sh.  The net gain for this trade is monthly return of 17%, if SLW price stays above $34 by Oct. 22.
  3. Using the credit due to the roll ups, I wrote more covered calls of NFLX (short call Oct $175, net cost $159.42/sh).  Monthly return 19.1% at the current price of $170.81.  If NFLX goes above 175$ by Oct 21, my return is 33% in 1 month.
  4. LVS: rolled up Sept $40 to Dec $42 call for a net profit of $2.6/sh and a return of 20.6% in 3 months or 82.4% annualized.

About admin

Richard Cheng, M.D., Ph.D., is an avid Wall Street investor with 20+ years of investing experience. He is specially adept at observing the world to find the patterns and then design strategies to win his battle. Most, if not all, happenings in the world, follow certain patterns. These patterns may be complex, multi-factorial, not so intuitive at the first glance, or even may appear chaotic. However, even chaos has its own patterns. If you pay attention and be patient, you'll find them and then you will gain an upper hand in your battle. Using this blog space, he documents his trades and his thoughts as they happen. He uses this blog as a a notebook to help him better refine his strategies. Hopefully this will help you as well. Good luck in your trading.
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2 Responses to Roll Up

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